Back > Contact: Marc Panoff Chief Financial Officer Nephros, Inc. Tel: 212-781-5113                                                                                             FOR IMMEDIATE RELEASE Todd Fromer or Garth Russell KCSA Worldwide 212-896-1215 / 212-896-1250 tfromer@kcsa.com / grussell@kcsa.com Nephros Reports Third Quarter 2005 Financial Results NEW YORK, November 11, 2005 -- Nephros, Inc. (AMEX: NEP) announced today financial results for the three months and nine months ended September 30, 2005. For the quarter ended September 30, 2005, Nephros reported net revenue of $225,248, attributable to sales of its OLpūr™ MD190 product in Europe, compared to $46,379 in the corresponding period of 2004. The Company’s net loss was $1,747,882 for the third quarter of 2005, versus a net loss of $1,881,849 in the third quarter of 2004. Nephros reported a net loss attributable to common stockholders in the third quarter of 2005 of $1,747,882, or $0.14 loss per basic and diluted share, compared to a loss of $8,864,795, or $3.89 loss per basic and diluted share, in the year-earlier period.  The average number of common basic and diluted shares for the quarter ended September 30, 2005 was 12,307,089, compared to 2,280,176 for the quarter ended September 30, 2004. For the nine months ended September 30, 2005, Nephros reported net revenue of $2,353,339 compared with $46,379 in the same period of 2004. For the first nine months of 2005 net revenue recognized from product sales totaled $603,339. Nine month net revenue also included a one-time, upfront fee of $1.75 million resulting from Nephros’s license agreement with Asahi Kasei Medical Co., Ltd., the largest filter provider in Japan, entered into on March 2, 2005. Nephros’s net loss was $4,173,102 for the first nine months of 2005, versus a net loss of $5,579,615 in the comparable period last year. Nephros reported a net loss attributable to common stockholders of $4,173,102, or $0.34 loss per basic and diluted share, for the first nine months of 2005, compared to a loss of $17,314,148, or $9.49 loss per basic and diluted share, in the same period last year. The average number of common basic and diluted shares for the nine months ended September 30, 2005 was 12,254,753, compared to 1,825,013 for the nine months ended September 30, 2004. It should be noted that Nephros does not recognize revenue from product sales until a customer’s right of return has expired.  It should also be noted that the differences between net loss and net loss attributable to common stockholders for the 2004 periods are the result of the accrual of preferred dividends and the accretion of a beneficial conversion feature associated with Nephros’s issuance of series D convertible preferred stock. As of September 30, 2005, Nephros had cash, cash equivalents and short-term investments of $6,827,693.  “Nephros continues to build key relationships with physicians, clinical groups and government agencies on both sides of the Atlantic that can lead to future growth, and pursue sales opportunities for our core OLpūrä MD190 filter in Europe.  Our marketing trials are progressing in Europe, with preliminary data expected before year-end.   We were also issued a key U.S. patent for our OLpūrä H2Hä online hemodiafiltration module in July, highlighting the unique and proprietary value we’ve created with this technology.  We are moving ahead with our strategy to be the first to introduce more effective therapy here in the United States using our H2Hä platform, increasing our OLpūrä filter sales opportunities accordingly,” stated Norman Barta, chief executive officer of Nephros. About Nephros Inc. Nephros, Inc., headquartered in New York, is a medical device company developing and marketing products designed to improve the quality of life for the End-Stage Renal Disease (ESRD) patient, while addressing the critical financial and clinical needs of the care provider. ESRD is a disease state characterized by the irreversible loss of kidney function. Nephros believes that its products are designed to remove a range of harmful substances more effectively, and more cost-effectively, than existing treatment methods; particularly with respect to substances known collectively as "middle molecules," due to their molecular weight, that have been found to contribute to such conditions as dialysis related amyloidosis, carpal tunnel syndrome, degenerative bone disease and ultimately, to mortality in the ESRD patient. Forward Looking Statements This news release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended.  Such statements may include statements regarding the efficacy and  intended use of Nephros’s technologies under development, the timelines for bringing such products to market and the availability of funding sources for continued development of such products and other statements that are not historical facts, including statements which may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words.  For such statements, Nephros claims the protection of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the control of Nephros.  Actual results may differ materially from the expectations contained in the forward-looking statements. Factors that may cause such differences include the risks that:  (i) products that appeared promising in research or clinical trials to Nephros may not demonstrate anticipated efficacy, safety or cost savings in subsequent pre-clinical or clinical trials; (ii) Nephros may not obtain appropriate or necessary governmental approvals to achieve its business plan; (iii) product orders may be cancelled, patients currently using Nephros’s products may cease to do so and patients expected to begin using Nephros’s products may not; (iv) hemodiafiltration therapy may not be accepted in the United States and/or Nephros’s technology and products may not be accepted in current or future target markets, which could lead to the failure to achieve market penetration of Nephros’s products; (v) Nephros may not be able to sell its products at competitive prices or profitably; (vi) Nephros may not be able to build key relationships with physicians, clinical groups and government agencies, pursue or increase sales opportunities in Europe or elsewhere, or be the first to introduce hemodiafiltration therapy in the United States; (vii) Nephros may not be able to secure or enforce adequate legal protection, including patent protection, for its products; and (viii) Nephros may not be able to achieve sales growth in Europe or expand into other key geographic markets.  More detailed information about Nephros and the risk factors that may affect the realization of forward-looking statements is set forth in Nephros’s filings with the Securities and Exchange Commission, including Nephros’s Annual Report on Form 10-KSB filed with the SEC for the fiscal year ended December 31, 2004 and its Quarterly Report on Form 10-QSB filed with the SEC for the fiscal quarter ended June 30, 2005.  Investors and security holders are urged to read those documents free of charge on the SEC’s web site at www.sec.gov.  Nephros does not undertake to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise back to top ^

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